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Permalink Reply by Brian Bennington on May 16, 2015 at 10:08pm

Reading your post, and at 21 views I'm one for the few who have, I have one gigantic question.  Just what are you trying to accomplish?  Seriously, do you believe any salesperson "worth their salt" wants to work in a no-commission environment?  I'd suggest, if you're in business to make as much money as possible and you're looking for a simple way to get the quality of reps to help you accomplish this, you find out what dealers in your area similar to you are paying, then up the ante and get the word out.  A well thought-out escalating pay plan, based on gross, units and CSI will handle it.

However, if you're looking for some "cheese dog" way to keep your payroll as low as possible, you might review the "get what you pay for" concept.  As to "looking for young people," if you're not aware of it, millennials in general are growing less and less mature by the day, thanks to the "Everyone gets a trophy" societal attitude of today's "do gooders."   Compared to young people even 20 years ago, it's like hiring 15 year olds to staff your floor.  Easy to compensate for, though, just by putting a 35 to 40 year age minimum on who you interview.  By that time, even the least mature of them will understand that more production equals more pay.  (That is, unless they work for the government!) 

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Permalink Reply by John Roberts on May 16, 2015 at 10:38pm

Brian,

I have never been one to scimp on paying my salespeople, I have always felt if my salespeople make a lot of money, the dealership did too. I personally have been on commission for the last 28 years, and do believe that true salespeople want to be on commission, you work hard and get paid well. Our pay plan, for a good salesperson, is the best in the area. 

I do not plan to cut my current guys pay, just looking at possible ways to attract some of the younger generation into the store. I do though agree with you that most of them don't really want to have to work hard unfortunately. 

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Permalink Reply by Brian Bennington on May 17, 2015 at 12:07am

So, if this is all about getting young people on board, I'd say "forget it."  Let the big dealer groups "pioneer" this.  Otherwise, you're headed for genuine heartbreak, and you best remember if a Millennial goes "sour" on you, their "mother government helps everyone" mentality could bring you unnecessary scrutiny, and defending your business practices to the authorities is never cheap.  If you're running a dealership and have 28 years of commissioned sales experience under your belt, I'd tell you to "use the force, Luke."  (That is, unless your family owns the dealership.)  If not, believe me, you have the savvy to pick-up in an interview or two who will actually workout for you.

By the way, who's encouraging you to add Millennials?  A son or daughter who's one?  And, it's not that they don't want to work hard, it's that they believe they don't have to work hard!  And, their likely "equality for all" attitudes can "bleed over" into their selling as they will never quite understand why some pay more than others for the same vehicle.  Asking about how a "interview-ee" feels about that should definitely be an interview question.

I do "get it" you'd like some younger reps on board, but as I originally asked, what are you trying to accomplish (by having them)?     

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Permalink Reply by David Simpson on May 17, 2015 at 11:47am

A pay plan is a job description, so I like Brian's question; "What are you trying to accomplish?"  

Admittedly, I am a "mad scientist" when it comes to pay plans, and there is more than one way to have a pay plan that is considered "commission".  Commission is to be paid for what you sell, not exclusively how much you sell it for.  More often than not, the amount of profit on a deal is as much a function of the desk as it is of the sales person.  

I believe that pay plans should be a fluid concept.  If I have a sales person who is going on vacation in a month, or getting married, or having a wedding anniversary, I might give them some specific "bogeys" that will allow them to feel like they can make whatever they need to based on their specific goals for the next 30 days, understanding that if I can help them to meet their individual goals, I will meet my goals for the store.  

I might have bonuses based on purely sales volume, aged inventory, a bonus based on the highest cumulative gross profit from sales for the month with a volume qualifier, bonuses based on converted service customers, lease penetration, finance penetration, CSI, etc...  I had a superstar sales person who had "manager-itis", so I would bonus him on things like if the least productive sales person from the previous month cracked the top-3 on the board the following month, and my guy hit his goals as well, I'd pay him an extra $1000.  I would do the same for new-hires, if a new hire could crack the top-3 within 90 days and my superstar hit his goals as well, $1000.  "Manager-itis" cured, and peer-mentorship eventually permeated my sales culture.

A caveat to this is that talking about your pay plan on the sales floor is a firing offense, however if we are negotiating pay plans at the beginning of each month the way professional athletes negotiate contracts at the beginning of each season, sales people own their compensation; this protects my employee satisfaction, which enhances customer satisfaction, which equates to good grosses and creates more tenured sales people over time.

I wanted to be sure and not create more work for my accounting office, so I would input compensation in the recap on a deal by deal basis, and keep a spreadsheet for each sales person.  At the end of the month, their goal-specific bonuses were calculated and paid on their "washout" check on the 10th.  

Weekly in my one-on-ones with sales people, I would review not only where they were in regards to their sales goals, but where they were in regards to their compensation goals as well.  Once again using the pay plan as a motivator, and a management tool.

Don't be afraid to make compensation part of your conversations with your people at the beginning of each month when you talk to them about their goals.  Aligning the goals for the store with the goals for each sales person, and utilizing the pay plan to drive behaviors, I believe you will find that pay plans become a lot less of a mystery, for seasoned sales people as well as millennials.  

 

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